At the height of the expenses scandal in 2009, a little-known BBC news presenter made the headlines by revealing her £92,000-a-year salary on air and getting into a public spat. Carrie Gracie told a Labour peer that, unlike the MPs charging for “chandeliers and manure”, she never even claimed for telephone calls “because I understand what public service is about”.

Gracie returned to the headlines last week when she resigned as China editor and accused her employer of illegal pay discrimination. A dispute simmering since last summer, when publication of BBC pay scales first revealed how few of the best-paid stars were women, boiled over and led to days of outrage and mockery over the BBC and its treatment of women.

In an interview for the BBC’s Woman’s Hour, Gracie explained that she had turned down a £45,000 pay increase that would have taken her overall pay to £180,000, but left it below that of two male international editors, the US editor, Jon Sopel, and the Middle East editor, Jeremy Bowen.

“I didn’t want more money – do you understand – I wanted equality,” she said. Support was immediate and widespread: within hours, #istandwithcarrie was trending on Twitter, with women including Clare Balding and Gabby Logan tweeting their support.

The row has been painful for the BBC, exposing deep divisions among some of its best-known staff and evoking memories of the Savile scandal when its failure to act became symbolic of wider social injustice. In raising issues of inequality and fairness, Gracie has put the BBC at the heart of two of the defining issues of our age.

Former Countryfile presenter, Miriam O’Reilly, won an ageism case against the corporation. Photograph: Andrew Fox for the Observer

Miriam O’Reilly, the former BBC presenter who took the corporation to court for ageism and won, said the reaction proved that dissent was now much more widespread: “I don’t think I’ve experienced anything like it; the reaction has been incredible.”

After an award-winning 30-year career at the BBC, Gracie is conscious of the criticism about the highly paid women leading the charge for equality. In her letter announcing her decision, she wrote: “Many of the women affected are not highly paid ‘stars’ but hard-working producers on modest salaries. Often, women from ethnic minorities suffer wider pay gaps than the rest.”

Jane Bradley, a former BBC journalist who now works for Buzzfeed, reflected the distaste many felt when a leaked recording of a conversation between John Humphrys, the BBC’s highest-paid news presenter, and Sopel showed him making light of the issue. “Hilarious banter from Humphrys who earns £600k a year whilst (female) friends of mine work overnight shifts to produce the programme on £38k.” One BBC news employee said: “This affects so many women of all ages, grades and ethnicities and in every kind of job. Carrie has a lot of support.”

The issue of equal pay is not entirely straightforward, however, with complexities and contradictions everywhere apparent in a system in which pay relates to the individual and not necessarily the job. Gracie pointed out the illogicality in the fact that her pay as a returning BBC News presenter of £145,000 “will be paid more for sitting in warm studio than hurtling round country of 1.4 billion 24/7. Strange.” With a wage boosted by her stint in Beijing, she will presumably be paid more than some of her colleagues doing exactly the same job.

The BBC would be breaking the law if it attempted to cut the wages of its male employees; instead, it needs to encourage them to take a pay cut voluntarily. Humphrys is one of the few to have gone public with his own decision to take a £120,000 cut, which still leaves him earning roughly four times the prime ministerial wage for working 15 hours a week on the Today programme and presenting Mastermind.

Amid rumours that Huw Edwards and Chris Evans were both being encouraged to think about how much they are paid, one senior BBC editor said: “I think the men will have to give up the money. They [the BBC] can’t force them, but they can just make it so uncomfortable for them.”

Some observers argue that there is a distinction between covering the US, which is on the main news programmes all the time, and the newer beat of China, with its surveillance and other hardships. In an interview during a period of long-service leave to supervise her children’s A-level exams, Gracie spoke of these difficulties: “I find it a hard environment, very punishing, the pollution, congestion, travelling, intensity of surveillance, difficult ethical issues.” Yet some at the BBC point out that Bowen, who has worked as a war correspondent for much of his career and whose driver was killed by Israeli mortar fire in 2000, has suffered from post-traumatic stress disorder.

One editor suggested it was typical of Gracie to stir things up. Another said: “She is very direct, good fun and a good person, but maybe quite naive, definitely idealistic.”

The daughter of an oil executive and born in Bahrain, Gracie joined the BBC as a trainee producer in 1987 after going to both Edinburgh and then Oxford universities, where she graduated with a first-class degree in philosophy, politics and economics.

She was Beijing correspondent from 1991 until 1995 and fitted in an MA in design for interactive media as well as a degree in Mandarin. She first moved back to the UK in 1999 because her young daughter was ill. In 2005, she was diagnosed with breast cancer but returned to work as soon as she could.

Her former husband, the Chinese rock musician Jin helped to look after their two children, now 21 and 19, while Gracie spent half the year in China. Her frequent trips home to London included her first stint as a Today programme presenter last summer.

John Humphry was recorded joking with Jon Sopel about Grace’s resignation. Composite: Rex

During her 30 years at the BBC, there have been several pay scandals. In 2009, when Gracie was disclosing her salary, Jonathan Ross was on a £16.9m three-year contract and the deputy director general Mark Byford was about to be given £1m to leave the BBC. Greater disclosure and a squeeze on public finances have conspired to change the culture so that such high pay at a public broadcaster is distasteful.

Full disclosure of all those earning more than £150,000 a year was only agreed in the last charter settlement and the BBC has announced plans to cut £80m from its news budget. The pay deals of men from the earlier era now look outdated. “This is a hangover from the age when money was thrown around to stop people getting poached,” said one BBC News insider. “Now there’s a sense that £300,000 is quite a lot of money for a nice job which lots of people want to do.”

Some blame the former director general John Birt, who is credited with making the BBC more competitive in the 1990s but also for introducing market-based reforms. “This should mean the BBC gets back to the pre-Birt era, before these people were treated like stars, not journalists,” said one insider. Several mentioned the fact that the BBC’s status as a trusted news source, still watched by millions, was worth a pay cut. “If it’s money you need, the BBC is not the place,” said a supporter of BBC women. “If public service and a good living wage is, then please stay.”

The BBC’s handling of the crisis has attracted a huge amount of criticism. From its initial statement that its pay was “fair”, to its decision to stop any presenter who had ever expressed any support for equality from reporting on the issue, BBC management appeared surprised by a turn of events it must have known about for weeks.

It took Fran Unsworth, the newly appointed first female head of news, more than 24 hours after the story broke to send an email to all staff: “Pay is an issue that we need to resolve swiftly and get right. This is a priority not just for me, but for the entire BBC.”

Its continuing insistence that an independent audit of on-air presenters would be published within a few weeks did little to assuage the doubts of those who refused to believe last year’s report of rank-and-file staff, which found “no systemic discrimination”.

As so often in the past, the BBC finds itself, often unwillingly, at the forefront of changes demanded by society. From April, all larger employers will be legally obliged to publish their pay for men and women.

Given the insults traded over the past week, it is perhaps surprising that Gracie and O’Reilly ended the week on a positive note. Tweeting after her last shift for Today, Gracie said that although the week had been a “bit W1A”, referring to the BBC comedy: “What other news organisation would let you call it secretive and illegal on #equalpay, + still let you front flagship show? Despite troubles, #BBC IS GREAT.”

O’Reilly, who now campaigns against ageism and sexism, said times had changed since she quit the BBC a year after her successful court case because of “humiliating” treatment. “This is an opportunity now, not just for BBC women but for all women. If you can show that you can stand up to being treated unequally to men, women will benefit all around the country.”

THE GRACIE FILE

Born Carrie Gracie in 1962 in Bahrain, where her father was working as an oil executive; raised in Scotland. Degrees from the universities of Edinburgh and Oxford. Before entering journalism she taught in China. Two children with Chinese rock musician Jin.

Best of times She was appointed BBC News’ first editor for China in 2013.

Worst of times Quite possibly the current furore over equal pay at the BBC. Though she appears to be handling matters with wit and grace.

What she says “I would not wish to be remembered forever as the woman who complained about money.”

What they say “A farce. The BBC could pay its female Today presenters equally if it retired John Humphrys.” – Ben Bradshaw